AI Adoption and Youth Labour-Market Slack: Early Evidence from EU Countries

This paper examines whether the sharp adoption of artificial intelligence (AI) is beginning to reshape age-specific labour-market outcomes in Europe. While public debate often focuses on junior job destruction, the first effects of AI may instead appear through weaker labour-market attachment, reduced hours or poorer early-career matching. Using Eurostat data for EU-27 countries in 2021–2025, we combine country-year measures of enterprise AI adoption with unemployment and labour-market slack by age group: youth workers aged 15–24, adults aged 25–54 and seniors aged 55–74. Country panel estimates show no significant differential association between AI adoption and youth unemployment relative to seniors. However, enterprise AI adoption is positively and consistently associated with labour-market slack among younger workers relative to seniors, particularly through forms of labour underutilisation that extend beyond unemployment. These results suggest that the early aggregate effects of AI may be less visible in unemployment than in broader forms of labour underutilisation. The findings point to the importance of monitoring the quality and stability of early-career labour-market entry as AI adoption accelerates.